Previous studies have shown that cholesterol in atherosclerotic plaques is present in both intracellular and extracellular forms. We have investigated a mechanism for extracellular cholesterol accumulation, and examined the susceptibility of this pool of cholesterol to be mobilized by cholesterol acceptors, a step in reverse cholesterol transport. Human monocyte-derived macrophages were incubated with acetylated LDL to allow cholesterol enrichment and processing. We subsequently labeled these macrophages with a monoclonal antibody that specifically detects ordered cholesterol arrays, revealing the presence of cholesterol-rich microdomains on the cell surfaces and in the extracellular matrix where the cholesterol-rich microdomains occurred in the form of spherical cholesterol-rich particles. The liver X receptor (LXR) agonist TO901317, which upregulates ABCG1, increased the deposition of cholesterol microdomains. Incubation of macrophages with AcLDL together with 50 ug/ml apoA-I eliminated all extracellular and cell surface-associated cholesterol microdomains, while incubation of macrophages with the same concentration of HDL only removed extracellular matrix-associated cholesterol microdomains. Only at an HDL concentration of 200 ug/ml did HDL eliminate the cholesterol microdomains that were cell-surface associated. This shows that apoA-I is a more efficient acceptor of cholesterol from the cell-surface associated cholesterol microdomains than is mature HDL. This is presumably because apoA-I interaction with macrophages is known to generate efficient cholesterol acceptors in the form of nascent HDL phospholipid-containing discoidal particles. Experiments using macrophages from ABCG1 knockout mice showed that macrophage generation of the extracellular matrix-associated cholesterol microdomains was completely dependent on ABCG1. This finding demonstrates a previously unknown ABCG1 function and step in reverse cholesterol transport in which cholesterol is first deposited and then mobilized from the extracellular spaces surrounding macrophages. Our findings show that generation of extracellular cholesterol microdomains is mediated by ABCG1 and that reverse cholesterol transport occurs not only at the cell surface, but also within the extracellular space. That macrophages excrete cholesterol into the extracellular space where it can be stored until mobilized by cholesterol acceptors is an entirely new concept in the reverse cholesterol transport process.